Ubuntu uses the Debian Testing installer. Most of Ubuntu's packages are almost taken directly out of Debian Testing, and most third party packages (such as libdvdcss) work fine in ubuntu as long as you choose the 'debian testing' or 'sarge' versions.
The thing that Ubuntu does vs Debian that is so magical is that they provide a single default configuration. It's designed for desktop usage and it has a base setup that is easy for most users to grasp and get working quickly. They subtly modified the Gnome desktop to make it more user friendly and and have a desktop-friendly OS setup. Also for my Laptop they have a special 'laptop mode' that include much laptop-specific packages that got installed by default. Pretty nice.
Debian on the other hand had a default 'desktop' setup that left out most of the packages that I needed. This is normal for Debian because it aims to be a very generic and customizable Linux distro, but is troublesome for new users.
I used Ubuntu for a bit, but then made the mistake of upgrading to Hoary to get the X.org stuff, because I wanted to play around with it.
Hoary is NOT like Debian Ustable/Sid. It's more like Debian's various Experimental developement groups. Debian Sid is made up of packages that are eventually going to be included into Sarge, currently, because it's the current testing version. Hoary seems more setup to be the next version and is a more radical change. Most of the packages are still Debian Testing, but the GUI related and end-user releated stuff is all very beta.
At least that is my impression. For instance with the Gnome packages are all from Gnome 2.9 development snapshots.
I did learn some interesting things, though. People are now rapidly moving towards a FreeDesktop standard for doing Menu entries in a special XML formated file. This means that programmers can make software that can use a default way to set menu entries for end-users, which will be nice and help out making 'universal' linux packages and install scripts, which should make it nice. Pretty much like what Debian and Mandrake's 'Debian-style" menu managment already does, but in a form that most everybody can agree on. Yay for Freedesktop.org